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Trusts

This category contains 137 posts

Two trustees go down to the woods … one is discharged, one is not

The use of corporate trustees is a common response to trustee liability.  However, where one of two natural person trustees retires and a corporate trustee is appointed, it is important to consider whether the retiring trustee has been discharged.  See ss 43, 45 and 46 of the Trustee Act 1956, which provide: Relevant Legislation 43 Power … Continue reading

Who pays the piper?

When a trustee retires, it is necessary to transfer the trust’s assets from the trustees (including the retiring trustee) to the continuing and any new trustee.    Where a trustee is removed in contentious circumstances the trustee may be unwilling to assist in the transfer of trust property.  Sometimes with good reason – for example where … Continue reading

Expectation denied

Expectations, great or otherwise are tricky to enforce.  When a person who had expectations in respect of an estate is disappointed there are various options for challenge open to the disappointed party.  However, each has thresholds that need to be satisfied. Consider the case of Blumenthal v Stewart.  Mr Blumenthal was the son of Mr … Continue reading

Undocumented loans 

The informality associated with loans between family members can lead to later disputes when different interpretations of the transaction emerge. Warin v Warin is a case in point. In that case $367,903.90 was advanced to the Warins’ daughter. The loan comprised: $100,000 that was initially secured by mortgage in 1997 $141,749.70 that was loaned to … Continue reading

Update on memorandum of wishes case

“The last of the Memoranda shows that Mr White Senior wished each of his three children to enjoy the benefit of his estate equally and that the property be sold to one of his three children. We will return to the words of the Memoranda in due course.” Thus starts the Court of Appeal decision … Continue reading

Taxation of Trusts

Draft interpretation statement PUB00261: Income tax – taxation of trusts has been released for consultation. PUB00261 summarises the tax law as it applies to trusts and when finalised it will replace the Commissioner’s original statement on the trust rules in the “Explanation of Taxation of Trusts” in the Appendix to Tax Information Bulletin Vol 1, … Continue reading

Jurisdiction failure

Estates can take time to administer and distribute.  Beneficiaries can tire of waiting.  Or they might require funds to sue the executors or other stuff.  The remedies available to beneficiaries depend on part as to whether the estate has transitioned from the administration phase.  See transition from executor to trustee.  This was of relevance in … Continue reading

Ouch

In Davis v White (see You aren’t my beneficiary – are you??) a trust was found to have failed by reason of uncertainty. The second hearing of the matter related to costs and is a sobering tale for trustees. Mrs White who incurred significant costs (AUD 40,893 and $85,369.50 in New Zealand, plus disbursements) said that the proceedings could … Continue reading

Using enduring powers of attorney to exercise trustee powers

The issue of incapacitated trustees is not a new one.  Trustees continue to age and many do not retire when they can still elect to do so.  This leaves the issue of removing incapacitated trustees and transferring property held by them to continuing and new trustees. While it is generally accepted that an attorney under an … Continue reading

A sorry tale …

As noted in the judgment McLaren v McLaren at [1]  this case relates to “… a sorry tale of what can occur when a family adopts an inappropriate form of trust deed without adequate advice or sufficient understanding of the legal effect of its terms. In this case, a son who was given a power … Continue reading